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tv   Closing Bell With Maria Bartiromo  CNBC  February 17, 2012 4:00pm-5:00pm EST

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have a good weekend. i'll see you again on tuesday. maria continues now with the "closing bell." and it is 4:00 on wall street. do you know where your money is? hi, everybody, welcome back to the "closing bell." i'm maria bartiromo on the floor of the new york stock exchange. happy friday to you. here's what we're following at the close tonight. what a week for the bulls on wall street. the dow up for the fourth time in five days. it is now up 50 points, hitting the key psychological level of 13,000, due to more optimism about the greek debt crisis and improving economic data here at home in the united states. all the optimism happened to fuel another move in oil today, selling at a nine-month high of $103.24 a barrel. will sky-high oil end up stalling the u.s. recovery. alan krueger will join me coming up in the program. how we finished the day on wall street. fractional moves on the day, with the dow up 46 points, off the best levels of the session. nasdaq reversing course, still
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up 13% year-to-date. nasdaq down about eight points. and the s&p 500 higher by a fraction, at 1361. let's get all the action from courtney reagan, our woman on the floor of the nyse today. >> we didn't quite make it to 13,000, but we were close, what, about 50 points off the highs. thought we would do it. didn't quite do it. maybe we'll see what happens on monday, or tuesday rather, because the markets are closed on monday. if we get the deal over the weekend, or at least the agreement for the second round of bailouts for greece, we might see a little bit of a pullback on tuesday, a sort of the bit of a sell on the news. let's look where some of the dow components since the last day we hit 13,000. that was hit back on may 19th of 2008. look at this. mcdonald's up 65%. home depot up 62%. lowest of the five, coca-cola, still 20%. where there are winners, there
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are certainly losers. bank of america down 78%. who is surprised about that. probably not a lot of you that have been watching the financially closely since 2008, the crucial year. at&t down 26% there. not bad. we didn't quite make it to 13,000, as we said. we were all hoping for it. it was going to be an exciting day. vix trading below, or moving below, i should say, 18. that's a markdown of about 7%. despite the low volatility, it looks like risk on is back. oil prices up, gold down, that ten-year above the 2% level. we'll see if that continues after the events of the weekend. we'll see exactly how they unfold. i do want to mention msg. take a look at shares there. spiking on some of the headlines that we got here. we're up about 3% into the close. msg network has been blacked out on time warner for seven weeks. a lot of the customers unhappy. "the new york times" is reporting that they have resolved the dispute and will hear about it at some point
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today. so far, we have not heard that. that is what "the new york times" is reporting. let's check and see how we rounded out the week. the russell did a really nice job. small caps up 1.9%. that was the leader. the nasdaq and s&p higher, the dow up 1.2%. what a week it was. that's the end of it. we'll see what happens next week. >> i believe cnbc has also confirmed that "new york times" report. we also have that confirmation. we're watching that. have a nice weekend. courtney reagan. u.p.s. trying to make a takeover. that top business headlines. at&t still in talks with u.p.s. after it rejected the $6.5 billion takeover offer. 42% premium offered for the closing price today. at&t faces pressure to shake up the board and increase shareholder value. the nyse is not waiting long to get baek in the hunt for acquisitions.
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the nyse making an initial bid for the london metal exchange. the bids will be considered by the board next week. analysts say the lme could be valued as much as 2$2.4 billion. oil prices today, a big story. closing out a great week with another rally. crude oil increasing by 93 cents a barrel tonight to settle at a nine-month high of $103.24 a barrel. it was close, but no cigar for the markets. we saw the dow post a modest rally today, but fell short of the 13,000 milestone by about 50 points, that we haven't seen since may of 2008. the major indices did manage to finish with gains. some are wondering if the rally had legs into the year. our next guest is taking a bullish stance. he's a chief investment strategist. and jeffrey, chief market
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strategist. gentlemen, it is nice to have you on the program. welcome to the show. >> good to be here. >> let's talk a bit about what's behind this move we've been seeing in stocks. of course, nasdaq seeing the most excitement, and money with the nasdaq up, what, 13% or so just in 2012. do you think that's justified, based on what you're seeing in terms of the fundamentals, david? >> i do. you know, technology has been a sector that we've really liked. we've seen really a ripping advance of apple. other tech stocks doing well. we think that it is justified. technology and nasdaq have further to go in 2012. we'll see some -- >> sorry. >> we'll see the inevitable pullbacks along the way. >> jeffrey, what kind of a year are you expecting? >> we're expecting a year where we haven't see the highs yet, 8% or 12% gain for the s&p 500. not going to come in a straight line. we've taken a few steps forward. we're probably due for a step back.
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earnings, up 55% over the last three years. seems the stock market, that heavy reliance on earnings is going to be a challenge in the first quarter where earnings are only expected to be up 1% year over year. where is the earnings growth that will drive these stocks higher. it's only later in the year we get clarity around the election that the stocks break out to their highs. >> that's a great point. it's said we're already seeing an impact on corporate earnings. you're also expecting that the expectations out there for corporate profits are too high? >> yes, i do. i think they're still too high. analysts have come down. remember, we started the fourth quarter with expectations around 15%. they've come in at 8%. expectations now have come down sharply for the first quarter as well. they're probably still going to move lower. individual investors have been pessimistic, but they've increasingly become more optimistic, and that balance has now come together. i think we're due for a step back. >> dave, what do you say to that? that earnings are way too high,
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the expectations? >> well, earnings expectations were high. earnings expectations were guided down coming into the quarterly earnings reporting season. i think even with weak earnings, or not robust -- as robust as we've had in the last year or two, or several quarters, with multiple expansion, we can see the move higher in stocks. but i agree, we're due for a pullback here. >> gentlemen, thank you very much. great to have your insights on this. we'll be watching this market and we'll see you soon. the oil effect, alan krueger is here with me. he'll tell me whether higher oil prices could threaten the economic comeback. and john hofmeister with us, giving his prediction of how high oil and gas could be impacting the economy. stay with us on the "closing bel bell". so uh this is my friend frank and his, uh, retirement plan.
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welcome back. congress hands president obama a victory after both chambers passed a bipartisan deal today to extend the payroll tax cut, and unemployment benefits. a key part of the president's economic recovery plan, which was just released. joining me to lay out the white house blueprint for the economy, alan krueger. he joins us now for a first on
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cnbc interview. good to have you on the program, sir. thank you so much for joining us. >> sure, my pleasure. >> why don't you characterize where we are in the recovery right now. clearly we're seeing positive signs. what do you see as the most promising of the most recent reports? >> well, we've had positive economic growth for ten quarters in a row. given the deep hole we were in, i think it's a good sign we're coming out. we're slowly digging our way out of that deep hole. job growth has been positive for private sector employers for 23 months in a row. 3.7 million jobs have been added. and the pace has picked up the last few months, which is an encouraging sign. if you compare job growth in this recovery, to the last one, job growth came earlier. and we've added a lot more jobs than we did in the recovery nearly in 2000 at this point. we're battling the same pace for private sector job growth, as we were in the recovery in the early '90s.
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that's an encouraging sign, because we know that job growth was quite strong in the '90s. that's important we stay on that path. >> where is the job growth right now? >> last month job growth was pretty widespread. we saw job growth in manufacturing, and we've added 400,000 jobs in manufacturing since the end of the recession. but last month we saw job growth in construction, hospitals, services, pretty much across the board. though major exception was state and local governments. we continue to be losing teacher jobs. that's why i think it's important that the president proposed in the jobs act and reiterated in the budget and state of the union a fund to retain schoolteachers and first responders. >> let me ask you about the bipartisan deal, real victory today. what do you say to those who are concerned that the measure adds to the federal deficit? here we are every day talking about the deficit, and getting our arms around our own financial house. what do you answer those critics
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who say it's not going to do much to boost the economy but it will add to the deficit? >> well, i think it will do much to boost the economy. a number of independent economists have said that. we need to do two things at once, maria. we need to support the recovery. i think it's very important that we sustain and strengthen the recovery. and at the same time, we need to get the fiscal situation under control to move to a sustainable budget in the intermediate and longer tesm. and the president proposed just doing that, a balanced approach which relies on additional revenues and cut in spend. >> so what are you expecting this to do in terms of the immediate impact? what should folks expect out there? >> well, i think it's very good news that congress followed the president's request, extended the payroll tax cut, and continued extended unemployment benefits. they did it as requested without delay, without drama. i think this should add some confidence. i think one of the risks we
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faced was that there may have been some gaps when it came to these policies. and we've seen momentum in the economy. and i think it's important that we take every step that we can to keep that momentum going. >> so, you know, despite the improvements that we're seeing, there are no job openings for nearly 3 out of every 4 unemployed. isn't there still weakness in the labor market when you look at the fact that you're still talking about people giving up looking and they still can't find something, and even ben bernanke has called this a crisis because of the amount of time that people are out of work. >> you know, we've seen the unemployment rate come down from 10% to 8.3%. >> pretty extraordinary, right. good direction. >> at 8.3%, it's still unacceptably high. the president is not satisfied with the unemployment rate where it is. but you have to step back and look at the problems that the economy went through over a period of decades. it all kun min natd in the financial crisis. the president has outlined a number of steps.
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i think congress acted on two very important measures, the payroll tax cut, which will give the typical worker an extra $40 per pay period to spend, as well as extending unemployment benefits. but the president has a broader agenda, including a fund to retain teachers, support for infrastructure, the unemployment rate is still much too high for construction workers. we have a great need for improving our roads and highways and ports and that will help productivity in the future. now seems to me to be the right time to invest more in infrastructure. >> sure. we are already seeing that anticipation pay off. you had construction jobs last month, as you pointed out earlier in the interview. let me ask you about fiscal policy versus fed policy. a lot of people say fed policy is more and more at odds with the economic data we're seeing right now. do you think you'd like to see more from the federal reserve? >> we have a long tradition of the executive branch not commenting on federal reserve policy. i think it serves the country
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well. so i'll take a pass on your -- >> now -- >> your appropriate question. >> there is still the criticism out there, businesses feel the regulatory environment is keeping their hands tied, that they're being targeted by the administration, by measures like dodd/frank, th volcker rule, how can the businesses create jobs in all this political football, and do you think that if you were to see policies that were more favorable toward businesses, that businesses would in fact create jobs and accelerate the positives you're talking about? >> i don't think the reason why job growth hasn't been stronger is related to regulatory policy. >> really? >> businesses have been very profitable. investment has been strong. if this were an environment where excessive regulations were slowing businesses down, i don't think you would see such high profit rates. >> you think it's more of a demand story? you think it's more of a demand
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story, and that's why it's not higher? >> absolutely. the number one reason businesses say they don't have enough customers. it's important that congress did extend the tax cut and unemployment payments. >> people are very happy about that, that's for sure. congratulations on that victory. good to have you on the program, mr. krueger. we'll see you soon. >> thank you. >> let's get reaction to what mr. krueger said about the economy. steve liesman joins me now with his take. >> i think it's interesting to think about what mr. krueger was saying right there. and sort of what was not said. i think the administration right now is feeling its oats a little bit more on the economy. the numbers have broken their way, as you point out. and i think what's interesting here is that it forces, i guess the best way to put it, the
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counterfactual shoe to be put on the other foot. before the numbers got better, the administration had to argue, things would be a lot worse, if not for the things that they -- the policies they enacted during the crisis. now the republicans have to say, things would be a lot better if not for the policies that were enacted. you do have job growth. i do think when i hear him talk, maria, i think i know that he knows that these games they've had are tentative, that a month or two could go by. the unemployment rate could spike back up. that the hole is very deep here. i don't think they're going to be out there crowing on the economy, but i think it's a better story and it changes the political dynamic a lot. >> yeah, it's interesting. you know, at this point, it really does feel like we've turned a corner in terms of employment, in terms of sentiment. but europe is such a wild card, steve. that's really where the caution is. anything can happen with europe in the balance. >> and what's interesting, maria, europe is only one of the things that hangs over the economy. we've seen the higher gas
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prices. and europe as well. and a bunch of other things. the housing and foreclosures hanging over this economy. any one of these things have the potential to create trouble down the road. so i think the best the administration can do is say, things are better. they're not great. and that's a tough story to tell, too. i mean, we've heard disagreements where president obama's approval ratings are. gallup this morning said it's only down 44%, a level at which presidents don't get reelected. other polls show him at 50%. to me it's a question that's really month to month. if that unemployment rate goes back up next month, the political calculations will change. this is not a long-term story. where people say definitively, i feel better about this economy. >> a great point, steve. we will leave it there. steve, we'll see you soon. thank you. and of course, the housing market also showing some signs of life. up next, who the biggest names
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in the mortgage business explain what it will take to get the housing market rolling again. and later, just how high will oil go if nuclear tensions with iran don't cool meister with me a few minutes. too many people are spending time talking about the unemployment rate, and what it's doing and the odd things about the labor participation. but the job numbers per se, things related to jobs, are looking very grim. >> bull markets usually end with euphoria. and although i think there's clearly some more enthusiasm towards the stock market, it's hard to say that investors are euphoric about -- well, let's put it this way, about u.s. stocks. >> volatility since the beginning of the year has been in the toilet. over the last 30 years, the s&p has moved at an annualized rate of about 8.5%.
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that is crazy like 2004, 2005 low. >> i think that what we're going to look for is a weakening of the early leaders. when the basic materials and the semis no longer respond to news, that's when you start to think maybe the market's going to pause. i don't think it's a pullback, more that we might be flat and we just rotate into other cyclicals during that time.
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i'm bertha coombs at the nymex. the best performer in the oil patch this week, up more than 4.5%. better than expected economic news here in the u.s. and of course, the underlying continuing concerns about the supply disruptions in the event of an iran nuclear confrontation. meantime, we did see products today, and also brent crude which yesterday closed out at 2012, closing new highs. did see some profit taking today going into the long weekend. the big mover on the week turns out to be natural gas. we've got a better than expected eia member, and today we get a count from baker hughs that nat gas rigs are down to 2009 levels. and they actually have fallen now for the sixth straight week.
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maria, nat gas producers trying to fix that equation on the glut of nat gas by cutting back on production. it looks like others are shutting in. >> thank you so much, bertha. let's look at some of the stocks we're following on the ticker tonight. oppenheimer raises its price on the stock on apple because of higher expectations for sales of iphones and ipads. stock today flat at $502.12 a share. solar shares shining today. the panel maker saying it has resolved issues at a new plant near los angeles, clearing the way for more than $600 million in federal loan guarantees. the company sold off last week, you may remember, after warning that a loan could be in jeopardy if the permit issue was not resolved. the stock up better than 7% today. freak car america, one of the biggest performers on the upside, swung to an $8.5 million fourth quarter profit after
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losing $3.5 million a year ago. it was significantly better than the expectations due to strong demand for freight cars to haul coal and other commodities. up today 19%. let's look there. cnbc spoke to two of the biggest names in the mortgage business today to talk about the reform, the recent attorney general settlement and the state of the housing market. >> john stumpf, with the largest originator, both of them lauding the recent ag settlement saying it's needed to get the housing market healthy again. stumpf said they're reforming freddie mac and fannie mae. >> the government still needs to be involved in some way. because there's $10 trillion of mortgages in this country. so you need a secondary market. and i think there is where the government can play a role. it should be explicit.
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it should get paid well for their risk. and it should be a catastrophe kind of risk support. >> reform not expected anytime soon. but they see a program to rent foreclosed properties launching in the near future, and expect it to be a joint effort. as for the $25 billion settlement, wells, jpmorgan and three others signed for improver foreclosures. >> start with the $3 billion of the $25 billion that's for refinancing. those are people who could not refinance. those who can refi, those who can modify will have a benefit through their life of the mortgage. so i think it's more impactful than people say. >> on a positive note, he also said he believes there is the housing market has bottomed. for more, go to cnbc.com.
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>> a major company bringing jobs back to the u.s. >> i'm jane wells. after a fierce competition, caterpillar picked a location for the new north american plant. here's a hint, it was filled with people who feared the end of the world as we know it. the but now there's shiny happy people. the answer later on the "closing bell." >> up next, could gas prices hit $5 a gallon this year. john hofmeister is with me. he's predicted they will, and he'll explain why. stay with us. also ahead, a look at next week's key reports on housing and consumer sentiment. find out what else is on tap in the u.s. and europe that could impact your investments. that's coming up right here on that's coming up right here on the "closing bell."
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the perfect storm, oil prices march higher, as the u.s. economy shows signs of improving. while tensions between iran and the west escalate.
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how high will crude go? will drivers be pumping record high gas this summer? and how will a potential showdown in washington over the keystone pipeline impact an oil-thirsty nation? we'll get some answers. and now, maria bartiromo. >> and with today's gain of 93 cents a barrel, crude oil notched its biggest weekly gain for the year. it is now at the highest level in nine months. how will the key elements pushing oil today play out over the next few months? joining me on the telephone from houston is john hofmeister, the founder and ceo of citizens for affordable energy and former ceo and president of shell oil usa. he's also a cnbc contributor. good to have you on the phone, john. thank you so much for joining us. >> maria, i'm sorry, my plane was late. but yes, we really had a mess on our hands with respect to the ins and outs of the oil market. traders may love it, but consumers are going to hate it. you know, the fundamental
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problem i think is that we just did not plan for this in the united states. we didn't plan for the geopolitical uncertainty. we didn't plan for asia's rise in demand. and we have a business as usual approach in the oil production side, mainly driven by government policy. and i'm fearful that we're going to face very high prices as this year progresses. >> everything just seems to be coming together at once. when you mentioned the geopolitical issues, let me get there for a moment, because iran, i mean, is iran or the improving u.s. economy, which is the biggest consumer of oil, along with china, the fuel behind the move in oil do you think? and how would you expect the iran debacle to play out? >> well, you're exactly right, it's all three interconnected, one to the other. the world's biggest consumer, the world's fastest growing economy, the u.s. and china, and iran likes nothing better than to play havoc in all of this. that's what i think will
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continue as the year progresses. i think we'll just get stuck day after day after day from iran, that will play out as geopolitical tension. iran would like nothing better than to send the west into a very deep recession and high oil price ss a good way to do that, particularly -- and i'm very critical of the last two administrations, including the incumbent, in washington, for having taken just a business as usual approach to the future of oil production. and, you know, the 2012-2017 plan that has been announced is nothing but business as usual. the keystone pipeline deferral, business as usual. these are critical times, and we're not seeing the leadership that could enable this nation to take care of itself for a change. >> we don't have an oil policy. how about that. you know, john, we see a pretty big disparity in prices between west texas intermediate and brent. why do you think there's that
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spread? >> well, i think brent -- i'm sorry, west texas intermediate is so bottled up, that we have more of it than we can use. so that compresses the price. we don't have the infrastructure to move it to the refinery system. and one of the reasons our gasoline prices are being so impacted, with the shutdown of the three refineries in the pennsylvania area, that's going to cause more brent finished product to be imported into the middle atlantic and new england states. so you're going to see higher priced oil products coming into the market, because the brent price is now going to affect the american consumers more so than it has in the past. >> i see. the eu has said it will stop importing oil from iran by july 1st, if iran continues to develop the nuclear program. do you think that will occur? >> don't hold your breath. no, i don't. i think there will be so many waivers and exceptions. because if the least of all
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parts of the world that could afford higher crude oil prices, is the european union. with all its other problems. >> right. >> to take an iranian crude out of the market is just not in the interests of the european economy. i, frankly, think it will be a lot of talk and no action. >> that would be -- i mean, if they were to do that, that would be another sort of pressure on oil to push it up, right? >> absolutely. >> on one hand it's positive anyway. we're now approaching the busy driving season, so this is also going to add to the situation, gas prices hitting a national average of $3.42 this week. a lot of people talking about $4. even $5 a gallon. is that likely? what do you think the driving season looks like this year? >> well, i started talking about $5 in 2012 in 2010. you just look at the u.s. failure to respond and you look at the growth in china. those two dynamics alone are enough to push oil prices, let
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alone all of the other insecurities. but yes, i think we're seeing the inverse law of supply and demand. in other words, our demand is down 6% year over year, and our prices keep going up. >> right. >> that is a real contradiction. and it's very hard for consumers to understand. it's hard for policymakers to understand. but the reality is, we're at the mercy of the global markets, not at the mercy of our own contribution to those global markets. >> with all this talk about fracing and all this talk about shale, you know, you still are not seeing that impact prices. you're not seeing that impacting things at all in terms of the expectations that you've got more supply. >> that's really just a trickle in the scheme of things. >> okay. >> don't forget, the gulf of mexico has been declining because of the moratorium, and the absence of drilling. so the trickle of shale oil doesn't make up for the losses in the gulf of mexico, net-net, and a lot of what the government is counting as liquids produced, saying we're producing more, are
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really natural gas liquids, which do not turn into gasoline or diesel. >> okay. >> so there is a production upside, but it's not helping the gasoline or the diesel market. >> understood. john, good to have you on the program. thanks so much. >> thanks, maria. >> we appreciate you weighing in. we'll see you soon. >> bye. >> john hofmeister. the other business headlines tonight, yelp, the review site is set to go public. the company filed for an ipo that will price on march 1st. it will offer more than 7 million shares. it would use the money to raise as much as $100 million. call it the italian job, police in italy seized $6 trillion in fake u.s. treasury bonds in switzerland. warrants have been issued for the arrest of eight people who are now accused of international fraud. the discovery coming after a year-long investigation between italian and swiss authorities. the cache of bonds was discovered in january, in three large trunks at a swiss trust company. did jeremy lin strike again?
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madison square garden reached an agreement to return the channel to the cable system's lineup. msg has been off time warner cable when they refused a demand of 50% in subscriber fees. surging interest in knicks, rising star point guard jeremy lin for bringing the sides back to the table. investors are getting ready for a very important weekend for the european debt crisis. >> i'm michelle caruso-cabrera. i'll have more on the high stakes op the weekend in europe. whether or not to loan 130 billion more euros to greece. that's coming up on the "closing bell." >> plus, from europe to the united states, we're rounding up all the economic and earnings data that could impact your investments. i'm jon fortt, and this is "tech check." a retailer is doing big
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business -- >> sending pens, and mochi pens have mochi functions. >> reporter: last year jet pens sold over 700,000 pens. many imported from japan, ranging from a couple bucks to $300. theirs is a low-tech niche and the marketing budget is limited, so much of it's done for cheap on social media. >> we integrate facebook, twitter, our blog. we also have other bloggers blog about us. >> reporter: they even hired an established pen blogser to interact with cut mecustomers t the site. >> what do you think we should give away on facebook for st. patrick's day? >> reporter: not an easy question with all these choices. want a green pen? there are more than 30 shades. maybe you want to write something a leprechaun size on a grain of rice. no kidding.
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welcome back. european finance minister is getting set to discuss the fate of greece in what is setting up to be a very high stakes weekend across the pond. michelle caruso-cabrera with more now with what's at stake. >> a lot a stake when it comes to money. 130 billion euros in new loans to greece. greece needs this money to, a, recapitalize their banks, make a
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big debt repayment in march, and to simply keep the government running. however, the new round of loans are controversial. because one of the key conditions they set down when they designed this loan package was greece's debt-to-gdp ratio has to fall by 20% by 2020. this new bailout package, no longer meets that condition. so here's the timetable for finding out if they're going to figure something out and go ahead request this anyway. a conference call on sunday, the finance ministers do that call and then meet face to face on monday. in theory by monday night we find out their decision. if they say yes, then greece's advisers begin to roll out the offer for the private sector creditors to exchange their greek debt that they own for debt of lesser value, 50% less. a yes from the finance ministers, however, is not definitive. there are in fact four possibilities. they could say yes they'll go ahead with the package anyway. advocates for this course of action like it because it solves the most pressing and immediate
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problem. greece's 14.45 billion euro debt repayment on march 20th. smooths a way for debt reduction, helps out with their cash flow issues for the next few years. they could say yes with conditions, that the bank needs to take a bigger hair cut or some of the other lenders under the eu, imf or ecb needs to forgive greece's debts. they could simply say no. i find this hard to believe, but advocates say it's like ripping the band eight o-aid off quickl. and they could simply delay which they've done a lot of. but if they delay that, the side deal with the private sector also gets delayed. then you're back to the question about what do you do with the march 20th payment and we're back up against the wall. hopefully we find out monday night. >> michelle, thank you. on to what we which should be watching next week, in addition to the monday meeting as the greece deal hangs in the
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balance. is there enough optimism in this part of the world to get that deal going. stephanie link, vice president of strategy and director of research, and quinton, founder and managing director. stephanie, it's decision time for european finance ministers on the greek bailout package. how do you see this impacting the markets next week? >> i think obviously on tuesday morning, we're going to obviously react to what we learned. i actually think you'll see passage. a lot of it is because of the language that we got from merkel, from monti, as well as the ecb deciding to do these bond swaps, too. i think we're going to get a resolution. but maria, it doesn't really solve anything, in the long term. greece still has problems with debt. greece still has problems with their economy. while we may get initial rally on the news, it kind of kicks the can. i think there are other data points next week for around the world that are probably even more important actually. >> quint, you say the rally is for real, seeing improvements in
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the economic front. initial claims out next week, that's certainly one to watch. what else will you be watching in more confirmation of the economic recovery here? >> well, we've been seeing the house be uptick now for quite a while now. but the other guest is absolutely right, the back drop is, what's going across the pond. and as long as that remains sort of subdued, and i think investors need to just observe the interest rates of other countries. greece, they're going to continue to have challenges, and quite frankly, i don't find a single person who just doesn't believe there will ultimately be some sort of default, whether it's structured or not. but the interest rates that are going in italy, or spain, or portugal, they have subsided. they're not seeing this fear that we've seen in the past. as those countries, and those investors around the world sort of subside from that, you know, chaos and the issues going on in europe, it makes the domestic markets and the united states
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that much more attractive. >> i see. so do you think we'll see more confirmation of that next week and do you think that the market is trading appropriately then with a gain of 13% on nasdaq? is it based on real fundamentals that you see changing? >> what we have to be focused on in the united states, what i've sort of been preaching to clients is we have a chase/hunt for yield. the federal government has made it very clear that interest rates are going to stay low in the united states for at least another two years. who knows. that could continue on. how could you compete, if you are a pension fund or large institution, that is quite frankly been behind for several years, how do you compete when you're looking at a johnson & johnson or proctor and gamble, when they don't have to do anything, they can remain flat for the next several years
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and pay a yield that is two and three times a risk-free treasury. >> stephanie, you also agree that this rally is for real, right? and you want to buy cyclicals? >> i do. we've been seeing very good data. particularly on the jobs side. initial claims, just hit a new cyclical low this week. the last 13 weeks, 12 out of 13, you know, the numbers were below 400,000. so the job market is improving. it's nowhere we needed to be. it will stabilize housing. it's been improving as well. manufacturing has grown 8% in the last three months. so i think this lends very positively to gdp revisions higher. and you want to follow cyclical stocks. they're the most levered to the higher gdp numbers. >> we will leave it there. great stuff. thank you both so much. we'll see you soon. caterpillar about to make the residents of one state shiny,pe.
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>> well, the region that won these new jobs is not cuyahoga, but should still be happy. we'll have the story a after the break.
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welcome back. the u.s. labor market has been seeing new signs of life recently. now cater pillar is said to give the market another boost by bringing back jobs from abroad. >> about two dozen states were vying for this $200 million plant which is being brought back from japan. athens, georgia, the winner. the plant will break ground in march and create 1400 direct jobs averaging probably 35 grand a year. plus support jobs making it the largest employer if had the area. there's a strong base of suppliers, workforce with manufacturing experience, and it has the infrastructure to be close to the port of savannah where a whole bunch of cats shipped out. the governor while not getting
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specific says they sweetened the pot. >> one of the things we're working on right now in the general assembly is to remove sales tax from energy used for manufacturing. >> losing out is arkansas where we visited a cat plant this month. by the way, georgia is a right to work state. cat has been no dog of the dow. have been busy working in titles of songs from hometown bands r.e.m. and b-52s. athens is full of shiny happy people driening on rock lobster after using pretty persuasion to land this monster deal. you're welcome. >> quoting r.e.m., it's not the end of the world as we know it, then jane? >> absolutely not. this is great news. there were 23 states plus canada and mexico vying for this. at least north america, the u.s.
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did land these jobs. >> thank you. great stuff. jane wells. up next we'll recap the gien for the markets. stay with us on "closing bell." ttd# 1-800-345-2550 let's talk about the typical financial consultation ttd# 1-800-345-2550 when companies try to sell you something off their menu ttd# 1-800-345-2550 instead of trying to understand what you really need. ttd# 1-800-345-2550 ttd# 1-800-345-2550 at charles schwab, we provide ttd# 1-800-345-2550 a full range of financial products, ttd# 1-800-345-2550 even if they're not ours. ttd# 1-800-345-2550 and we listen before making our recommendations, ttd# 1-800-345-2550 so we can offer practical ideas that make sense for you. ttd# 1-800-345-2550 ttd# 1-800-345-2550 so talk to chuck, and see how we can help you, not sell you. ttd# 1-800-345-2550 ♪
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welcome back. before we go, let's recap this move on wall street this week. the dow industrials gained 1.2% this week. put it within striking distance of a new level of 13k. 13,000. microsoft one of the big drivers. the stock has had a good week. it's showing a gain on the week as well as the last two weeks. it's now at a four-year high on microsoft. woun s&p 500 was up 1.4% this week. now higher for six out of the last seven weeks. led by financials and technology stocks. according to standard & poor's, the s&p 500 is now off to the best yearly start in a quarter century. last time the benchmark index rallied this much to start the year was in 1987. nasdaq finished lower today. nasdaq up 1.7% since monday due in large part to apple. it crossed $500 a share for the
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first time earlier this week. just a reminder, just 50 points away from 13,000 on the blue chip average telecom the big gainer on the session today. before we go, i want to give a big shoutout to all my friends on google plus where i am about to hit 1 million friends on google plus. i'm using google every day. google plus every day. and i appreciate that so many of you are following me and have given me great suggestions for questions for our guests. i hope that you are hearing your questions and every once in awhile i throw a shoutout so you know, in fact, i really did appreciate and use your questions. so thanks for that. a big shoutout to the almost 1 million of followers and friends on google plus. thanks, everybody. and i'll be updating and posting tonight and every day. that'll do it for us on "closing bell." thanks for joining us today. follow me on twitter and google plus. stay with cnbc. we've got a great
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